French banking group Societe Generale, the majority stakeholder of BRD, will pay 43 million euros for a stake of 7.32% in the Romanian bank, a stake included in the portfolio of the State Asset Resolution Agency (AVAS).
Valued at Tuesday's share price on the stock market of 32,700 ROL, the 7.32% stake would fetch around 80 million euros.
"The price for the stake the state still holds is the result of a balance between supply and demand in a very particular situation. The contest for acquisition of the stake was an open one, but Societe Generale was the only bidder. It was the government's choice to sell the stake in bulk," Patrick Gelin, chairman and general manager of BRD-SocGen, told Ziarul Financiar.
He says that the price paid for the 7.3% stake cannot be considered as relevant in assessing the total value of BRD, since it was settled following a point-by-point negotiation.
"The price of stock listed on the stock market does not give us any real indication as to the market value of BRD either, because we cannot speak of a capital market in the real sense of the word," said Gelin.
The purchasing contract was signed on Tuesday after more than two months of negotiations. The state did not rush to yield its participation in BRD and the privatisation commission was quite strict with the sole bidder, Societe Generale. The finalisation of this transaction marks the conclusion of the privatisation process of the second largest Romanian bank, which began in 1998 when SocGen acquired the majority stake of 42.1679%.
Through subsequent capital increases, the French shareholder has come to own 51% in the bank. Another 2.537% stake was sold through the stock market on September 10, 1999. And on November 24, 1999, a stake of 4.99% was acquired by the European Bank for Reconstruction and Development.
According to the contract signed on Tuesday, apart from the agreed price of the transaction, Societe Generale will also pay an additional amount equivalent to the corresponding value of the dividends for the period of 2004 in which AVAS was still a stakeholder in the bank. This amount will be established after the General Meeting of Shareholders sets the value of the dividend BRD paid for the year of 2004.
Following the acquisition of the 7.32% stake in BRD, the weight of Societe Generale in the shareholder structure of BRD rose to 58.32%. The other significant shareholders of the bank are EBRD and the five financial investment companies (SIF).
Patrick Gelin says Societe General has not made any plans for a possible delisting of BRD's shares.
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